Property developer jailed over £91K diverted funds
20 Nov 2020
A London property developer has been jailed for 27 months after diverting £91,000 of customer payments to his personal account and falsifying documents from the tax authorities
20 Nov 2020
Vijay Madhaparia has also been banned as a director of limited companies for ten years.
Harrow Crown Court heard that Madhaparia was director of Laxmi Development Ltd, a building development company incorporated in 2010.
The company was placed into compulsory liquidation in 2015 after failing to pay HMRC a debt of £124,000, which was later revised to £4.4m.
The Official Receiver was initially appointed as liquidator and further investigations uncovered several instances of misconduct by Madhaparia.
In 2012, he was disqualified as a director for three years after committing health and safety offences following a prosecution brought by the Health and Safety Executive (HSE).
Despite being disqualified, Madhaparia continued to act as a director and took on various construction and development projects until Laxmi Development was dissolved in September 2013 after the company had failed to file company records.
To get Laxmi Development reinstated, Madhaparia submitted company accounts in breach of his disqualification, which he falsely claimed had been audited and prepared by regulated accountants. This allowed the building development company to be restored to the Companies Register and receive substantial VAT repayments from the tax authorities.
Further enquiries uncovered that Madhaparia had taken on two renovation contracts in 2015 despite Laxmi Development having been wound-up, and he did so without informing the Official Receiver.
The court was told Madhaparia then proceeded to put £91,000 worth of payments for the renovation works into his personal account which he had spent on holidays and gambling, depriving his creditors of payment.
Also in breach of his disqualification, Madhaparia incorporated Classy Junction Ltd in February 2014. Just over a year later, in September 2015, the company dissolved and Madhaparia failed to file any documents relating to Classy Junction Ltd.
In court, his conduct was described as ‘a sustained, deliberate and repeated pattern of calculated deliberate deceit and dishonesty committed over a number of years’ by the judge.
Ian West, chief investigator for the Insolvency Service, said: ‘Vijay Madhaparia has been jailed for a significant amount of time after the court recognised the severity of his numerous misconduct offences.
‘His sentence should serve as a stark warning to other directors that you could be criminally prosecuted for offences against insolvency and company director law.’